UBS Global Asset Management has slashed the fees charged on its adviser class of exchange-traded funds (ETFs) in a bid to attract a greater slice of European ETF inflows.

UBS has slashed expense ratios across its ‘A’ share class of ETFs.

The new lower fees, which pertain to the asset manager’s ‘A’ share class ETFs, have been applied with immediate effect, resulting in instant cost savings and tighter index tracking for investors in these ETFs.

In contrast to most ETF providers, UBS launched its ETF range with two separate share classes – ‘A’ shares and ‘I’ shares. The ‘A’ share class is aimed at financial advisors and private investors; while the ‘I’ share class is aimed at institutional investors and high-net-worth individuals.

Until now, the ‘I’ share class had materially lower fees than the ‘A’ class in return for a higher minimum investment. However, following the price reductions across the ‘A’ share range, the two share classes have now been synchronised, though the minimum investment requirements still apply.

Andrew Walsh, Head of ETF Sales UK at UBS Global Asset Management, said: “UBS ETFs has a dual share class concept to offer clients choice and flexibility. The ‘A’ share class has competitive fees and a standard NAV per share, while the ‘I’ share class has lower fees and a higher NAV, offering economies of scale to larger investors.  The A share class is specifically optimized for exchange trading so investors benefit from high liquidity.

“Today, UBS ETFs has reduced the fees across its ‘A’ share class range to a record low, bringing charges into line with the higher volume ‘I’ share classes.  Investors in the ‘A’ share class range of ETFs benefit immediately from a significant reduction in investment costs, which will also make the index replication accuracy of our ETFs even more precise.

“These price reductions make UBS ETFs even more attractive for all investors.  With this move, UBS Global Asset Management continues to demonstrate its ambitions in the ETF business, with the aim of continuing its rapid growth.”

UBS is the fourth largest ETF provider in Europe, behind iShares, Deutsche Asset & Wealth Management and Lyxor, with approximately £8.6 billion in assets under management.

Examples of the new ‘A’ share class charges:

UBS ETF (LU) FTSE 100 UCITS ETF A (UB03)
TER 0.20% (was 0.35%)

UBS ETF (LU) MSCI World UCITS ETF A (UC55)
TER 0.30% (was 0.45%)

UBS ETF (LU) MSCI Japan UCITS ETF A (UB02)
TER 0.35% (was 0.55%)

UBS ETF (LU) MSCI Emerging Markets UCITS ETF A (UB32)
TER 0.45% (was 0.70%)